Gold Remains in CONTANGO, Silver Backwardation Increases Again

On Friday morning as gold broke $1881 for a new nominal all-time high (since surpassed today at $1895), Zerohedge and others reported that gold was trading in backwardation as a result of Chavez demanding repatriation of Venezuela's gold.
At the time we did not have time to verify the information, but now that we have, as of Friday's COMEX close, gold is most decidedly NOT trading in backwardation.

Front month gold futures settled Friday at $1848.90, and every single month forward is trading in increasing contango (normal market condition), culminating in $2036 for the June 2017 contract.
While a significant gold backwardation (particularly in the nearby front months) WILL INDICATE gold COMEX/ system collapse is imminent, the fact that gold remains strongly in contango after its recent $200 price move indicates that traders are not yet concerned with either an imminent collapse in the dollar, or a COMEX gold default.

Contrast this with silver's structure, which does continue to trade in backwardation, with back months' discount continuing to increase daily.

Daily Settlements for Gold Futures (FINAL)Trade Date: 08/19/2011
Month						Settle	Estimated Volume	Prior Day Open Interest
AUG 11						1848.9	328	641
SEP 11						1849.2	2,567	2,084
OCT 11						1850.1	15,192	27,404
DEC 11						1852.2	281,360	368,836
FEB 12						1854.0	2,917	27,129
APR 12						1856.0	536	7,110
JUN 12						1858.0	365	15,869
AUG 12						1859.9	53	6,222
OCT 12						1861.9	16	4,194
DEC 12						1864.1	1,970	12,426
FEB 13						1866.1	8	1,613
APR 13						1868.3	3	337
JUN 13						1870.8	14	11,850
DEC 13						1881.3	2	12,492
JUN 14						1893.9	-	3,620
DEC 14						1909.8	50	9,929
JUN 15						1929.7	50	4,780
DEC 15						1953.2	25	3,522
JUN 16						1977.0	3	31
DEC 16						2004.7	27	1,117
JUN 17						2036.0	-	40
Total							305,486	521,246

Silver continues to trade in contango for roughly a year out, from front months through July 2012, and enters backwardation from the Sept 2012 contract on out.
The July 2016 contract settled Friday at $41.156, a $1.272 discount from front month of Aug 2011, which settled at $42.428.
As we have stated previously, the fact that silver's backwardation continues to worsen while gold remains in contango indicates that silver's backwardation is a result of COMEX SILVER DEFAULT RISK, and not fears of an imminent dollar collapse (or else gold would also be trading in backwardation).

Daily Settlements for Silver Futures (FINAL)Trade Date: 08/19/2011
Month						Settle	Estimated Volume	Prior Day Open Interest
AUG 11						42.428	4	6
SEP 11						42.432	72,156	37,707
OCT 11						42.447	80	55
DEC 11						42.467	23,715	47,117
JAN 12						42.472	42	136
MAR 12						42.479	1,632	6,694
MAY 12						42.468	24	2,283
JLY 12						42.452	20	1,973
SEP 12						42.420	23	316
DEC 12						42.357	166	8,472
JAN 13						42.328	-	1
MAR 13						42.262	-	435
MAY 13						42.216	-	35
JLY 13						42.142	1	2,209
DEC 13						42.026	30	6,574
JLY 14						41.793	-	232
DEC 14						41.666	-	1,201
JLY 15						41.431	-	156
DEC 15						41.276	10	498
JLY 16						41.156	-	53
Total							97,903	116,153